LAWS 1013 - Law on Obligations and Contracts action to enforce their performance although in case of

voluntary fulfillment by the debtor, the latter may not

Lesson 1 – General Principles
recover what has been delivered or rendered by reason
Topic: Introduction to Obligations thereof. (Art.* 1423.)

Introduction:
“The law is the witness and external deposit of our moral
life. Its history is the history of the moral development of the
race. The practice of it, in spite of popular jests, tends to
make good citizens and good men.”
― Oliver Wendell Holmes Jr., The Path of the Law
ELEMENTS OF AN OBLIGATION
The following are the elements of an obligation:
1. JURIDICAL TIE OR VINCULUM JURIS OR EFFICIENT CAUSE
- the efficient cause by virtue of which the debtor becomes
bound to perform the prestation (Pineda, 2000).

PRELIMINARY TOPICS: 2. ACTIVE SUBJECT [CREDITOR OR OBLIGEE]

- The person demanding the performance of the obligation.
An obligation is a juridical necessity to give, to do or not to
It is he in whose favor the obligation is constituted,
do. – Article 1156 Civil Code
established, or created.
The term obligation is derived from the Latin word
“obligatio” which means a “tying” or “binding.” 3.PASSIVE SUBJECT [DEBTOR OR OBLIGOR]

1) It is a tie of law or a juridical bond by virtue of which one - The person bound to perform the prestation to give, to do,
is bound in favor of another to render something — and this or not to do.
may consist in giving a thing, doing a certain act, or not
doing a certain act. 4. OBJECT OR PRESTATION
- The subject matter of the obligation which has a
2) Manresa defines the term as “a legal relation established
corresponding economic value or susceptible of pecuniary
between one party and another, whereby the latter is bound
substitution in case of noncompliance. It is a conduct that
to the fulfillment of a prestation which the former may
may consist of giving, doing, or not doing something.
demand of him.”

3) Article 1156 gives the Civil Code definition of obligation, in NOTE: Absence of any of the first three makes the object
its passive aspect. Our law merely stresses the duty of the void.
debtor or obligor (he who has the duty of giving, doing, or
EXAMPLE
not doing) when it speaks of obligation as a juridical
necessity.  A promise to paint B’s picture for B as a result of
an agreement.
Obligation is a juridical necessity because in case of non-
compliance, the courts of justice may be called upon to (Here A is the obligor, B is the Oblige; the painting of B’s
enforce its fulfillment or, in default thereof, the economic picture is the object or prestation; the agreement or
value that it represents. In a proper case, the debtor may contract is the efficient cause.)
also be made liable for damages, which represent the sum
of money given as a compensation for the injury or harm
suffered by the creditor or oblige (he who has the right to
CONCEPT OF PRESTATION
the performance of the obligation) for the violation of his
A prestation is an obligation; more specifically, it is the
rights. In other words, the debtor must comply with his
subject matter of an obligation - and may consist of giving a
obligation whether he likes it or not; otherwise, his failure
thing, doing or not doing a certain act. The law speaks of an
will be visited with some harmful or undesirable legal
obligation as a juridical necessity to comply with a
consequences. If obligations were not made enforceable,
prestation. There is a “juridical necessity” for non-
then people can disregard them with impunity. If an
compliance can result in juridical or legal sanction.
obligation cannot be enforced, it may be only a natural
obligation.
FORMS OF OBLIGATION
NATURE OF OBLIGATIONS UNDER THE CIVIL CODE
(1) As a general rule, the law does not require any form in
Obligations which give to the creditor or oblige a right of
obligations arising from contracts for their validity or
action in courts of justice to enforce their performance are
binding force.
known as civil obligations. They are to be distinguished
(2) Obligations arising from other sources do not have any
from natural obligations which, not being based on positive
form at all.
law but on equity and natural law, do not grant a right of

A. OBLIGATION, RIGHT, AND WRONG (CAUSE OF
ACTION)DISTINGUISHED
(1) Obligation is the act or performance which the law will
enforce.
(2) Right, on the other hand, is the power which a person
has under the law, to demand from another any prestation.
(3)A wrong (cause of action), according to its legal meaning,
is an act or omission of one party in violation of the legal
right or rights of another, causing injury to the latter;
B. ESSENTIAL ELEMENTS OF CAUSE OF ACTION
(1) Its essential elements are:
(a) a legal right in favor of a person
(creditor/plaintiff) by whatever means and under
whatever law it arises or is created;
(b) a correlative legal obligation on the part of
another (debtor/defendant) to respect or not to
violate said right; and
(c) an act or omission in breach or violation of said
right by the defendant with consequential injury or
damage to the plaintiff for which he may maintain
an action for the recovery of damages or other
appropriate relief.
(2) If any of these elements is absent, the complaint
becomes vulnerable to a motion to dismiss on the ground
of failure to state a cause of action. The presence of a cause
of action rests on the sufficiency, and not on the veracity, of
the allegations in the complaint, which will have to be
examined during the trial on the merits. The test is whether
the material allegations of the complaint, assuming to be
true, state ultimate facts which constitutes plaintiff’s cause
of action such that plaintiff is entitled to a favorable
judgment as a matter of law.
(3) A cause of action only arises when the last element
occurs, i.e., at the moment a right has been transgressed.
(a) It is to be distinguished from right of action or
the right to commence and maintain an action, in
that the former is governed by the procedural law
while the latter depends on substantive law. The
right of action springs from the cause of action, but
does not accrue until all the facts which constitute
the cause of action have occurred. The action shall
be brought in the name of the party who by law is
entitled to the right to be enforced.
(b) An obligation on the part of a person cannot
exist without a corresponding right existing in favor
of another, and vice-versa, for every right enjoyed
by a person, there is a corresponding obligation on
the part of another to respect such right.
C. CAUSE OF ACTION BASED UPON A WRITTEN CONTRACT
Actions based upon a written contract should be brought
within 10 years from the time the right of action accrues.
(Art. 1144.) The accrual refers to the cause of action.
Accordingly, an action based on a contract accrues only
when an actual breach or violation thereof occurs.
Therefore, the period of prescription commences, not from
the date of execution of the contract but from the
occurrence of the breach. The cause of action resulting from
breach of contract is dependent on the facts of each
particular case
(1) In an action to rescind a contract of sale on installment
basis, for non-payment, the cause of action arises at the
time the last installment is not paid,
(2) Where an overdraft agreement stipulates that the
obligation is payable on demand, the breach starts only
when demand is made,
(3) In a contract of loan with real estate mortgage,
whereby the creditor could unilaterally increase the
interest rate, where the creditor foreclosed the mortgage
when the debtor failed to pay the loan, the cause of action
for the annulment of the foreclosure sale should be
counted from the date the debtor discovered the increased
interest rate,
(4) Where the agreement to buy and sell was conditioned
upon the conduct of a preliminary survey of the land to
verify, whether it contained the area stated in the tax
declaration, the right of action for specific performance
arose only when the plaintiff discovered the completion of
the survey
(5) With respect to money claims arising from a contract of
employment, which would prescribe in three years from the
time the cause of action accrued, the cause of action would
arise from the date the employer made a definite denial of
the employee’s claim, for prior to such denial, it is deemed
that the issues had not yet been joined because the
employee could have still been reinstated
(6) In an action for reformation of a contract, where the
plaintiff alleged, among others, that the contract was one-
sided in favor of the defendant, and that certain events had
made the arrangement inequitable, the cause of action for
reformation would arise only when the contract appeared
disadvantageous.
(7) The nature of the product sold is a major factor in
determining when the cause of action has accrued. For
example, when fuel oil is delivered in drums, a buyer readily
assumes that the agreed volume can be and actually is,
contained in those drums. He is not expected to make a
meticulous measurement of each and every delivery. In case
of short deliveries, the cause of action will arise only from
the discovery of the same with certainty.
D. INJURY, DAMAGE, AND DAMAGES DISTINGUISHED
The words “injury,” “damage,’’ and “damages’’ are
sometimes used synonymously, although there is a material
difference among them.
(1) Injury is the illegal invasion of a legal right; it is the
wrongful act or omission which causes loss or harm to
another, while damage is the loss, hurt, or harm which
results from the injury. On the other hand, damages denote
the sum of money recoverable as amends form the
wrongful act or omission; and
(2) Injury is the legal wrong to be redressed, while damages
are the recompense or compensation awarded or
recoverable for the damage or loss suffered.
E. EXISTENCE OF ONE WITHOUT THE OTHER
There may be injury without damage and damage without
injury.
(1) Proof of loss for injury — a wrongful violation of his
legal right is not sufficient to entitle a person to sue
another in a court of justice for the enforcement or
protection of said right. As a rule, there must be, in
addition, loss or damage caused to him by the violation of
his right. But except for actual or compensatory damages
(Art. 2199.), no pecuniary proof is necessary in order that
moral, nominal, temperate, liquidated, or exemplary
damages may be awarded. (Art. 2216.)
(2) Liability for damages of a person for exercising his legal
rights. — A person has the right to take all legal steps to
enforce his legal and/ or equitable rights. One who makes
use of his legal right does no injury.
Qui jure suoutiturmullum damnum facit. If damage results
from a person are exercising his legal rights, it is damnum
absque injuria (damage without injury). The plaintiff must
establish that the damage to him resulted from a breach or
violation of legal duty which the defendant owned to him;
otherwise, the consequences must be borne by the plaintiff
alone.
In other words, in order that the law will give redress for an
act (or omission) causing damage, that act must be not only
hurtful, but wrongful.
KINDS OF OBLIGATION ACCORDING TO SUBJECT MATTER
From the viewpoint of the subject matter, obligation may
either be:
(1) Real obligation (obligation to give) or that in which the
subject matter is a thing which the obligor must deliver to
the oblige; or
(2) Personal obligation (obligation to do or not to do) or
that in which the subject matter is an act to be done or not
to be done.
There are thus two (2) kinds of personal obligation:
(a) Positive personal obligation or obligation to do
or to render service (see Art. 1167.); and
(b) Negative personal obligation or obligation not
to do (which naturally includes obligations “not to
give”). (see Art. 1168.)
SOURCES OF OBLIGATIONS
1. Law (obligation ex lege)- like the duty to pay taxes and to
support one’s family
2. Contracts (Obligation ex contractu) – like the duty to
repay a loan by virtue of an agreement
3. Quasi-contracts (Obligations ex quasi contractu) – like
the duty to refund an “over change” of money because of
the quasi-contract of solution indebiti or “undue payment”
4. Delict, crimes or Acts or Omissions Punishable by Law
(Obligation ex malificio or ex delicto) – like the duty to
return a stolen carabao;
5. Quasi-delicts or torts – (obligation ex quasi-delicto or ex-
quasi-maleficio, Culpa aquiliana) – like the duty to repair
damage due to negligence.
This enumeration is exclusive. No obligation exists if its
source is not one of those enumerated in Art. 1157 of the
NCC (Navales v. Rias, G.R. No. L3489, September 7, 1907).
NOTE: ACTUALLY, THERE ARE ONLY TWO SOURCES (I.E.,
LAW AND CONTRACTS) BECAUSE OBLIGATIONS ARISING
FROM QUASICONTRACTS, DELICTS, AND QUASI-DELICTS
ARE IMPOSED BY LAW (LEUNG BEN V. O’BRIEN, 38 PHIL.
182).
Time of perfection
General Rule:
Law – from the time designated by the law creating or
regulating them;
 Contracts– from the time of the perfection of the contract
e.g. meeting of the minds
Exemption:
a. When the parties made a stipulation on the right of the
creditor to the fruits of the thing;
b. When the obligation is subject to a suspensive condition,
from which it arises upon fulfillment of the condition;
c. When the obligation is with a period; there is already an
existing obligation, but it is only demandable
when the period expires or becomes due.
5. Quasi Contracts, delicts, quasi-delicts – from the time
designated by the law creating or regulating them.
OBLIGATIO
LEGAL OBLIGATIONS or Obligation Ex Lege (article 1158)
Obligations derived from law are not presumed. Only those
expressly determined in the Code or in special laws are
demandable and shall be regulated by the precepts of the
law which establishes them and as to what has not been
foreseen by the provisions of Book IV of NCC (NCC, Art.
1158).
NOTE: If there is conflict between the New Civil Code (NCC)
and a special law, the latter prevails unless the
contrary has been expressly stipulated in the NCC (NCC, Art.
18; Paras, 2008).
Characteristics of a legal obligation
1. Does not need the consent of the obligor;
2. Must be expressly set forth in the law creating it and not
merely presumed; and
3. In order that the law may be a source of obligation, it
should be the creator of the obligation itself (NCC, Art.
1158).
Determining whether an obligation arises from law or from
some other source
1. Arises from law if it establishes obligation;
2. Arises from the act itself if the law merely recognizes the
existence of an obligation generated by an act (Manresa).
Examples:
1. According to Art. 2014 of the NCC, a loser in a
game of chance may recover his loss from the
winner, with legal interest from the time he paid
the amount lost (Leung Ben v. O’Brien, G.R. No.
L- 13602, April 6, 1918);
2. The obligation of the spouses to support each
other;
3. The obligation of the employers under the
Worker’s Compensation Act;
4. The obligations of the owners of the dominant
and servient estates in legal easements and others
scattered in the NCC and in special laws
5. The obligation to pay taxes.
CONTRACTUAL OBLIGATIONS (Article 1159)
Requisites of a contractual obligation
1. It must contain all the essential requisites of a contract
(NCC, Art. 1318); and
2. It must not be contrary to law, morals, good customs,
public order, and public policy.
Rules governing the obligations arising from contracts
General Rule: These obligations arising from contracts shall
be governed primarily by the stipulations, clauses, terms,
and conditions of the parties’ agreements.
Exemptions: Contracts with prestations that are
unconscionable or unreasonable (Pineda, 2009).
Binding force of obligation ex contractu
Obligations arising from contracts have the force of law
between the parties and should be complied with in good
faith (NCC, Art. 1159). This is known as the “principle of
obligatory force of contracts” the contract (Pineda, 2000).
Good faith is performance in accordance with the
stipulation, clauses, terms, and conditions of the contract.
General Rule: Neither party may unilaterally evade his
obligation in the contract.
Exemptions: Unilateral evasion is allowed when the:
1. Contract authorizes such evasion; or
2. Other party assents thereto.
Difference between an Obligation and Contract
An OBLIGATION is the result of a contract (or some other
source). Hence, while a CONTRACT, if valid, always results in
an obligation, not all obligations come from contract.
Be it noted that, however, from another viewpoint that a
contract may itself be the result of an obligation. Thus, if P
engages A as the former’s agent, we have the contract of
agency. As an agent, A has the obligation, say to look around
for clients or buyers, as in the real estate business. As a
result of such obligation, A may enter into a contract of sale
with C, a costumer. The contract of sale itself results in the
obligations to pay and to deliver. The obligation to deliver
may result in a contract of carriage.
The so-called INNOMINATE CONTRACTS
For want of an express name, the following are termed
“contratosinnominados”
a. Do ut des – I gave that you may give.
b. Do ut facias – I give that you may do.
c. Faciout des – I do that you may give.
d. Faciout facias – I do that you may do.
QUASI-CONTRACT (Art. 1160)
A juridical relation arising from lawful, voluntary, and
unilateral acts based on the principle that no one shall be
unjustly enriched or benefited at the expense of another
(NCC, Art. 2142).
Distinguished from “implied contracts”
An implied contract, in the proper sense, is a contract which
arises when the intention of the parties is not expressed, but
an agreement in fact, creating an obligation, is implied or
presumed from their acts, or where there are circumstances
which show a mutual intent to contract. An implied contract
requires consent while a quasi-contract, being a unilateral
contract, does not. The basis of an implied contract is the
will of the parties while the basis of a quasi-contract is law,
to the end that there be no unjust enrichment (Rabuya,
2017).
Characteristics of a quasi-contract
1. It must be Lawful;
2. It must be Unilateral; and
3. It must be Voluntary
Presumptive consent
Since a quasi-contract is a unilateral contract created by the
sole act(s) of the gestor, there is no express consent given by
the other party. The consent needed in a contract is
provided by law through presumption (Pineda, 2000).
Principal forms of quasi-contracts
1. Negotiorumgestio (inofficious manager) – Arises when a
person voluntarily takes charge of the management of the
business or property of another without any power from the
latter (NCC, Art. 2144);
2. Solutioindebiti (unjust enrichment) – Takes place when a
person received something from another without any right
to demand for it, and the thing was unduly delivered to him
through mistake
NOTE: The delivery must not be through liberality or some
other cause.
Query: is a Quasi-Contract an Implied Contract?
Ans: No, because in a quasi-contract (unlike in an
implied contract) there is NO meeting of the minds.
What is implied contract?
The meaning the history and said expression are set forth in
the decision, written by Mr. Justice Street, in the case of
Leung Ben vs. O'Brien (38 Phil., 182), from which we quote:
The term "implied contract" takes us into the shadow
domain of those obligations the theoretical classification of
which has engaged the attention of scholars form the time
of Gaius until our own day and has been a source of as much
difficulty to the civilian as to the common-law jurist. Here we
are concerned with those acts which make one-person
debtor to another without there having intervened between
them any true agreement tending to produce a legal bond
(vinculum juris). Of late years some American and English
legal writers have adopted the term quasi-contract as
descriptive of these obligations or some of them; but the
expression more commonly used is "implied contract."
The obligations which in the Code are indicated as quasi-
contracts, as well as those arising ex-lege, are in the
common law system merged into the category of obligations
imposed by law, and all are denominated implied contracts.
Examples of Quasi-Contracts
1. When during a flood, fire, or other calamity, property is
saved from destruction by another person without the
knowledge of the owner, the latter is bound to pay the
former just compensation. (Article 2168, Civil Code)
2. Any person who is constrained to pay the taxes of another
shall be entitled to reimbursement from the latter. (Article
2175, Civil Code)
No Unjust Enrichment
No one shall be unjustly enriched or benefited at the
expense of another.
DELICT or EX DELICTO
Pertinent Provision of the Revised Penal Code (RPC)
Article 100, RPC says, “Every person criminally liable for a
felony is also civilly liable.” The reason lies in the fact
oftentimes the commission of a crime causes not only moral
evil but also material damage. If no material damage is
done, civil liability be enforced.
Liability of an Insane Criminal
An insane man who commits a crime is exempted from
criminal liability, but his guardian can be held civilly liable
unless the latter was diligent in his task of taking care of the
insane. If there is no guardian or the guardian is insolvent,
the property of insane man can be held liable. (See Arts. 12
and 101, RPC).

Civil Action Implicitly Instituted in Criminal Case
As a general rule, whenever a criminal action is instituted,
the civil action for the civil liability is also impliedly instituted
together with the criminal action. (Rule 3, Section 1, Revised
Rules of Court)
Effect of DEATH of Criminal Offender pending trial
Buenaventura Belama vs. Marcelino Polinar
L-24098, Nov. 18, 1967
FACTS: the defendant in a criminal case for physical injuries
died before final judgment.
ISSUE: is his civil liability extinguished?
HELD: No, his civil liability is not extinguished for, after all, in
Art. 33 of the Civil Code, there can, in the case of physical
injuries, still be an independent action. The action will be
directed against the administrator of the estate, the
obligation having become the obligation of the heirs; but of
course the liability cannot exceed the value of inheritance.
Effect of ACQUITTAL in criminal Case
Suppose the defendant in a criminal case is acquitted, can he
still be held liable civilly?
ANS: it depends.
a. If the reason why there was an acquittal was because the
accused could not have acquitted the act, no civil action can
later on be brought.
b. If the reason for acquittal was because of exempting
circumstance (as in case the defendant is insane) he would
still be civilly liable
c. If there is an independent civil action allowed by the law,
civil liability may still arise if this action is instituted and the
defendant’s liability is proved by mere preponderance of
evidence (because while guilt beyond reasonable ground
might not have proved, it would be a simpler matter to
prove guilt by mere preponderance of evidence)
eg.Estafa case
QUASI-DELICT (Art. 1162)
A quasi-delict is a fault or act of negligence (or omission of
care) which causes damages to another, there being no pre-
existing contractual relations between the parties.
Culpa Aquiliana (quasi-delicts) can refer to acts which are
criminal in character, whether the same is voluntary or
negligent.
Examples
1. While driving a car recklessly, Pedro injured a pedestrian.
2. Pedro while cleaning his window sill, caused a flower pot
to fall on the street, breaking the arms of his neighbor.
Note: in the above examples, Pedro can also be charged
with the crime of physical injuries thru simple or reckless
imprudence.
Definition of NEGLIGENCE (Culpa )
a. Negligence is the failure to observe, for the protection of
the interest of another person, that degree of care,
precaution and vigilance which the circumstances justly
demand, whereby such other person suffers injury. (U.S. vs
Barrias, 23 Phil. 434)
b. As defined by the Civil Code, negligence is the omission of
that diligence which is required by the circumstances of
person, place, and time. (Art. 1173)
Test for determination of Negligence
“The test in determining whether a person is negligent…is
this: Would a prudent man (in his poition) foresee harm to
the person injured as a reasonable consequence of the
course about to be pursued? If so, the law imposes a duty on
the actor to refrain from that course, or to take precaution
against its mischievous results, and the failure to do so
constitutes negligence. Reasonable foresight of harm,
followed by the ignoring of the admonition born of this
provision, is the constitute fact of negligence.” (Picart vs
Smith, 37 Phil. 890)
Requirements before a person can be held liable for Quasi-
Delict
1. There must be fault or negligence attributable to the
person charged;
2. There must be damage or injury
3. There must be a direct relation of cause and effect
between the fault or negligence on the one hand and the
damage or injury on the other hand (proximate cause)
NOTE:
a. Proximate Cause is that adequate and efficient cause,
which in the natural order of events, necessarily
produces the damages or injury complained of.
in the case of Tuason vs Luzon Stevedoring Corp..,L-
13541, January 28, 1961, the Supreme Court held
that since the plaintiff, Eduardo Tuazon, was
travelling at a very high speed and on the wrong
side of the road, his negligence was the proximate
cause of the accident which badly injured him, and
therefore he cannot recover damages from the
other party in the collision.
b. There are instances when “although there is damage,
there is no legal injury or wrong” (damnum absque
injuria – damage without legal injury ) . (Example: if
 carefully driven car causes damage to a pedestrian general breach is
because the driver was suddenly struck by lightning, this committed.
is an instance of damage without injury) Effects Pay damages in case of Pay damages in case of
of breach of obligation by breach of obligationby
*** END of LESSON 1***
breach reason of delay, fraud, reason of delay, fraud,
REFERENCES
of negligence,contraventi negligence,contraventi
Textbooks
obligatio on of the tenor on of the tenor
De Leon, Hector S & De Leon , Hector Jr.. (2010). Obligations
n thereof (NCC, Art. thereof (NCC, Art.
and Contracts (pp.1-9)
1170). 1170).
LESSON 2 Effect of Fortuitous event Obligation is not
“The law is the witness and external deposit of our moral fortuitou extinguishes the extinguished (genus
life. Its history is the history of the moraldevelopment of the s event obligation. nunquamperuit –
race. The practice of it, in spite of popular jests, tends to genus never perishes).
make good citizens and good men.”

― Oliver Wendell Holmes Jr., The Path of the Law

Remedies of the creditor in case of failure to deliver the
LESSON PROPER: thing due
The following are the remedies of the creditor in case of
NATURE AND EFFECTS OF OBLIGATIONS
failure to deliver the thing due (Pineda, 2000)
TYPES OF REAL OBLIGATIONS
1. Determinate/specific – Particularly designated or SPECIFIC GENERIC
physically segregated from all others of the same class; Specific performance Specific performance
2. Indeterminate/Generic – Is designated merely by its class (delivery of anything
or genus; belonging to the same
3. Delimited generic – Generic objects confined to a species).
particular class (Tolentino, 2002); Rescission (action to rescind Ask the obligation be
e.g. An obligation to deliver one of my horses. under NCC, Art. 1380). complied with at the
debtor’s expense with a right
Obligations of a debtor in an obligation to deliver to recover damages.
The obligations of the debtor (in an obligation to deliver) Resolution (action for Resolution or specific
depends upon the kind thing involved: cancellation under NCC, Art. performance, with damages
1191). in either case (NCC, Art.
1191).
BASIS SPECIFIC GENERIC
Damages in both cases (NCC, Art. 1170).
What Deliver the thing Deliver the thing
NOTE: May be exclusive or in addition to the above mention
the agreed upon (NCC, Art. which is neither of
remedies
obligatio 1165). superior nor inferior
n consist quality if quality and
NOTE: In an obligation to deliver a specific thing, the
of circumstances have
creditor has the right to demand preservation of the thing,
not been stated by the
its accessions, accessories, and the fruits. The creditor is
parties. (NCC, Art.
entitled to the fruits and interests from the time the
1246).
obligation to deliver the thing arise.
Required Take care of the thing If the object is generic,
diligence with the proper but the source is Right of the creditor to the fruits
to be diligence of a good specified or delimited, The creditor has a right to the fruits of the thing from the
observe father of a family the obligation is to time the obligation to deliver it arises. However, he shall
d unless the law requires preserve the source. acquire no real right over it until the same has been
or parties stipulate delivered to him (NCC, Art. 1164).
another standard of
care (NCC, Art.1163).
What Deliver all accessions, Delivery of another Nature of the right of the creditor with respect to fruits
delivery accessories, and fruits thing within the same 1. Before delivery – Personal right;
comprise of the thing even genus as the thing 2. After delivery – Real right.
though they may not
s of promised if such thing
have
is damaged been due
mentioned (NCC, Art. Kinds of Delivery
1166). to lack of care or a
Delivery may be either actual or constructive.
a. Actual delivery (or tradition)– where physically, the
property changes hands.
Example: if A sells B a fountain pen, the giving by A to B of
the fountain pen is actual tradition.
b. Constructive delivery – that where the physical transfer is
implied. This may be done by:
i. Tradition simbolica (symbolical tradition – (as
when the keys of a bodega are given)
ii. Tradition longa manu (delivery by mere consent
or the pointing out of the object)
– Example: pointing out the car, which is the object
of the sale.
iii. Tradition brevimanu–(delivery by the short
hand; that kind of delivery whereby a possessor of
a thing not as owner, becomes the possessor as
owner)
(example: when a tenant already in possession buys
the house he is renting)
iv. Traditioconstitutumpossessorium– the opposite
of brevimanu; thus, the delivery whereby the
possessor of a thing as an owner, retains possession
no longer as an owner, but in some other capacity
(like a house owner, who sells a house, but remains
in possession as tenant of the same house)
v. Tradition by the execution of legal forms and
solemnities (like the execution of public instrument
selling land)
BREACHES OF OBLIGATIONS
Degree of diligence required
1. That agreed upon; that which is required by the nature of
the obligation and corresponds with the circumstances of a
person, time and place. (Art. 1173, Civil Code). This is really a
diligence of a good father of a family.
2. In the absence of such, that which is required by the law;
GR: In the absence of the foregoing, diligence of a good
father of a family
XPNs:
a. Common carriers requiring extraordinary diligence (NCC,
Arts. 1998-2002);
b. Banks require the highest degree of diligence, being
imbued with public interest.
Diligence of a good father of a family
That reasonable diligence which an ordinary prudent person
would have done under the same circumstances.
Forms of breach of obligations
1. Voluntary – Debtor is liable for damages if he is guilty of:
a. Default (mora)
b. Fraud (dolo)
c. Negligence (culpa)
d. Breach through contravention of the tenor
thereof (NCC, Art. 1170).
2. Involuntary – Debtor is unable to perform the obligation
due to fortuitous event thus not liable for damages.
What the obligation to give a determinate thing includes
(Art. 1166)
Example:
If I am obliged to deliver a particular car, I must also give the
accessories (like the “jack”). If I am obliged to deliver a piece
of land, accessions (like a building constructed thereon.)
(this is true even if no mention of them was made in the
contract).
Remedies of Creditor if debtor fails to do (Art. 1167)
1. To have the obligation performed (by himself or
by another) at debtor’s expense (only if another
can do the performance)
2. ALSO – to obtain damages. (Art. 1170) (Damages
alone cannot substitute for performance if owners
can do it; if purely personal or special – as a
painting to be done by a reputed artist - only
damages maybe asked, unless substitution is
permitted)
Reciprocal Obligations
Reciprocal obligations depend upon each other for
performance. (Example: in a sale the buyer must PAY, and
the seller must DELIVER the object of the sale) (See
discussion on Compensatio Morae)
DELAY (MORA) OR DEBTOR’S DEFAULT
Those obliged to deliver or to do something incur in delay
from the time the obligee (creditor) judicially or
extrajudicially demands from them the fulfillment of their
obligation.
In reciprocal obligations, neither party incurs in delay if the
other does not comply or is not ready to comply in a proper
manner with what is incumbent upon him. From the
moment one of the parties fulfills his obligations, delay by
the other begins (NCC, Art. 1169).
Kinds of delay
1. Ordinary delay – This is the mere failure to perform an
obligation at the stipulated time.
2. Extraordinary delay or legal delay – This delay already
equates to non-fulfillment of the obligation and arises after
the extrajudicial or judicial demand has been made upon the
debtor (Pineda, 2000).
Kinds of legal delay or default
2. From the nature and the circumstances of the
obligation it appears that the designation of time
when the thing is to be delivered or the service is to
be rendered was a controlling motive for the
establishment of the contract; or
3. Demand would be useless, as when the obligor
has rendered it beyond his power to perform [Art.
1169 (2)].

1. Mora solvendi – Default on the part of the debtor/obligor

a.Ex re – Default in real obligations (to give);
b.Ex personae – Default in personal obligations (to
do);
2. Mora accipiendi – Default on the part of the
creditor/oblige;
3. Compensatio morae – Default on the part of both the
debtor and creditor in reciprocal obligations.
Effects of mora solvendi
1. Debtor may be liable for damages (NCC, Art. 1155) or
interests; and
NOTE: The interest begins to run from the filing of the
complaint when there is no extrajudicial demand.
2. When the obligation has for its object a determinate
thing, the debtor may bear the risk of loss of the thing even
if the loss is due to fortuitous event;

MORA SOLVENDI
3. Debtor is liable even for fortuitous event (art. 1165),
Requisites although damages here may be mitigated if he can prove
1. Obligation Pertains to the debtor; that even if he had not been in default, loss would have
2. Obligation is Determinate, due and demandable, and occurred just the same. (Art 2215)
liquidated;
3. Obligation has not been performed on its Maturity date;
MORA ACCIPIENDI
4. There is Judicial or extrajudicial demand by the creditor;
and Requisites
5. Failure of the debtor to comply with such demand.
1. Offer of Performance by a capacitated debtor;
2. Offer must be to Comply with the prestation as it should
be performed; and
Non-applicability of mora solvendi
3. Refusal of the creditor without just cause (Pantaleon v.
Mora solvendidoes not apply in natural obligations because
Amex, supra).
performance is optional or voluntary on the debtor’s part.
One can never be late in not giving or doing something.
Effects of mora accipiendi
NOTE: A natural obligation is an obligation that has no legal
1. Responsibility of debtor is limited to fraud and gross
basis and hence does not give a right of action to enforce its
negligence;
performance. What is the difference between civil obligation
2. Debtor is exempted from risk of loss of thing; creditor
and natural obligation? A civil obligation (as defined in Art.
bears risk of loss;
1156) is based on positive law; hence, it is enforceable by
3. Expenses by debtor for preservation of thing after delay is
court action. A natural obligation on the other hand, is
chargeable to creditor;
based on natural law; hence, it is not enforceable by court
4. If the obligation bears interest, debtor does not have to
action.
pay it from time of delay;
5. Creditor liable for damages; and
Instances when demand by the creditor is not necessary in 6. Debtor may relieve himself of obligation by consigning the
order that delay may exist thing.

GR: No demand = no default [NCC, Art. 1169 (2)].

XPNs: Demand by the creditor shall not be necessary in

order that delay may exist when: COMPENSATIO MORAE

1. The obligation or the law expressly so declares; Reciprocal obligations

or Reciprocal obligations are those which arise from the same
cause, wherein each party is a debtor and a creditor of the
other, such that performance of one is conditioned upon the
simultaneous fulfillment of the other from the moment one
of the parties fulfills his obligation, delay by the other party
begins (ASJ Corporation v. Evangelista, G.R. No. 158086,
February 14, 2008).
Delay in reciprocal obligations
One party incurs in delay from the moment the other party
fulfills his obligation, while he himself does not comply or is
not ready to comply in a proper manner with what is
incumbent upon him.
Demand is only necessary in order for a party to incur delay
when the respective obligations are to be performed on
separate dates.
Effect of non-compliance of both parties in reciprocal
obligations
If neither party complies with his prestation, default of one
compensates for the default of the other
FRAUD (DECEIT or DOLO)
It is an intentional evasion of the faithful performance of the
obligation (8 Manresa 72).
the law prohibits any waiver of an action for future fraud
since the same is contrary to law and public policy. Waiver
for future fraud is void (NCC, Art. 1171).
Remedies of the defrauded party
1. Specific performance (NCC, Art. 1233);
2. Resolution of the contract (Art. 1191);
3. Damages, in either case.
CULPA or NEGLIGENCE
The fault or negligence of the obligor consists in the
omission of that diligence which is required by the nature of
the obligation and corresponds with the circumstances of
the persons, of the time and the place. When negligence
shows bad faith, the provisions of Art. 1171 and 2201,
paragraph 2, shall apply. If the law or contract does not state
the diligence which is to be observed in the performance,
that which expected of a good father of a family shall be
required (NCC, Art. 1173).
Test of negligence
Did the defendant in doing the alleged negligent act use the
reasonable care and caution which an ordinarily prudent
person would have used in the same situation? If not, then
he is guilty of negligence. (Picart v. Smith, G.R. No. L-12219,
March 15, 1918).

Kinds of Fraud
Fraud distinguished from Negligence
BASIS FRAUD IN THE FRAUD IN THE
BASIS FRAUD NEGLIGENCE
PERFORMANCE PERFECTION As to the There is There is no
Time of It occurs after It occurs before or
intention to deliberate deliberate
occurrence the valid simultaneous with
cause damage intention to intention to
execution of the creation or
cause damage. cause damage or
the contract. It is perfection of the
injury even if the
employed in the obligation
act was done
performance of a
voluntarily.
pre obligation As to the Liability cannot Liability may be
Consent Consent is free Consent is vitiated
mitigation of be mitigated. mitigated.
and not vitiated. by serious
liability
deception or As to the waiver Waiver for future GR: Waiver for
Misrepresentation of future fraud fraud is void. future negligence
Effect It is not a ground It is a ground for
may be
for annulment of annulment of the
allowed in
the contract. contract.
certain cases.
Remedy Action for Action for
XPN: Nature of
damages only. annulment with
the obligation or
damages.
public policy
requires
extraordinary
diligence. (e.g.
Waiver of action arising from future fraud
common carrier).
With respect to fraud that has already been committed
(past fraud), the law does not prohibit renunciation of the
NOTE: When negligence is so gross that it amounts to
action for damages based on the same since such can be
wanton attitude on the part of the debtor or such negligence
deemed an act of generosity. What is renounced is the
shows bad faith, the laws in case of fraud shall apply.
effect of fraud, particularly the right to indemnity. However,
Effect of good faith or bad faith of the obligor Proof of Proof of the The Accused
If the obligor acted in good faith, he is responsible for the Negligence existence of negligence shall be
natural and probable consequences of the breach of the contract of the presumed
contract and which the parties have reasonably foreseen at and of its defendant innocent
the time of the constitution of the obligation. If the obligor breach or must be until
is guilty of fraud, bad faith, malice or wanton attitude, he non- proved. the contrary
shall be responsible for all damages which may be fulfillment is is proved
reasonably attributed to the non-performance of the sufficientpri beyond
obligation. ma facieto reasonable
warrant doubt.
Contributory negligence of the creditor recovery.
GR: It reduces or mitigates the damages which he can Defense Defense of Defense of Defense of
recover. Available “good “good father “good father
XPN: If the negligent act or omission of the creditor is the father of a of a family” of a family”
proximate cause of the event which led to the damage or family” in in the in the
injury complained of, he cannot recover. the selection & selection &
selection & supervision supervision
Kinds of negligence or culpa supervision of the of the
of the employees employees is
1. Culpa contractual (contractual negligence) - Negligence
employees is a proper not a proper
which results from the breach of contract;
is not a and defense. The
2. Culpa aquiliana( civil negligence or tort or quasi-delict) proper complete employee’s
- Acts or omissions that cause damage to another, there complete defense. guilt is
being no contractual relation between the parties (NCC, Art. defense automaticall
2176); and though it y the
may employer’s
3. Culpa criminal (criminal negligence) – Those which mitigate civil guilt, if
results in the commission of a crime or a delict. damages. the former is
Culpa Respondeat insolvent.
Culpa Culpa
Aquiliana/Culp superioror
Contractual Criminal
aExtra- command
(Contract) Contractual (Delict)
responsibilit
(Quasidelict)
Existence Negligence Negligence Negligence y
of is merely an is is or the
negligence incident in substantive substantive master and
the And and servant rule.
Proof Prepondera Prepondera Proof of
performanc independent independent
needed nce of nce of guilt beyond
e of an . .
evidence. evidence. reasonable
obligation.
Contractua There is GR: There is There is no doubt.
l Relations always a pre no pre- pre-existing
existing existing contractual FORTUITOUSS EVENT/CASO FORTUITO
contractual contractual relation. An occurrence or happening which could not be foreseen, or
relation. relation. even if foreseen, is inevitable (NCC, Art. 1174).
Source of The source The source The source
Obligations of obligation of obligation of obligation
Of Is defendant is an act or
Requisites:
defendant negligence omission
1. Cause of breach is independent of the will of the debtor;
to pay Itself punishable
2. The Event is unforeseeable or unavoidable;
damages is by law.
3. Occurrence renders it absolutely impossible for the
the breach
debtor to fulfill his obligation in a normal manner -
or non-
impossibility must be absolute not partial, otherwise not
fulfillment
force majeure; and
of the
4. Debtor is free from any participation in the aggravation of
contract.
the injury to the creditor.

NOTE: The fortuitous event must not only be the proximate
cause but it must also be the only and sole cause.
Contributory negligence of the debtor renders him liable
despite the fortuitous event (Pineda, 2000).
If the negligence was the proximate cause, the obligation is
not extinguished. It is converted into a monetary obligation
for damages.
Liability for loss due to fortuitous event
GR: There is no liability for loss in case of fortuitous event.
XPNs:
1. Law;
2. Nature of the obligation requires the assumption of risk;
3. Stipulation;
4. The debtor is guilty of dolo, malice or bad faith, has
Promised the same thing to two or more persons who
does not have the same interest (NCC, Art. 1165);
5. The debtor Contributed to the loss (Tan v. Inchausti&
Co., G.R. No. 6092, March 8, 1912);
6. The possessor is in Bad faith (NCC, Art. 552); or
7. The obligor is Guilty of fraud, negligence or delay or if
he contravened the tenor of the obligation (Juan Nakpil
v. United Construction Co., Inc. v. CA, G.R. No. L-47851,
April 15, 1988).
ACT OF GOD distinguished from ACT OF MAN
Act of God Act of Man
Fortuitous event Force majeure
Event which is absolutely Event caused by the
independent of human legitimate or illegitimate
intervention acts of
persons other than the
obligor
e.g. Earthquakes, storms, e.g. Armed invasion,
floods, epidemics robbery, war (Pineda,
2000)
NOTE: There is no essential difference between fortuitous
event and force majuere; they both refer to causes
independent of the will of the obligor (Tolentino, 2002).
Effects of fortuitous events
1. On determinate obligation – The obligation is
extinguished.
2. On generic obligation – The obligation is not
extinguished (genus nun quamperuit – genus never
perishes).
Examples
a. A is obliged to give B his Car bearing plate
number XXX 1234 (Determinate thing). Before
delivery, an earthquake destroys completely
the car. The obligation to deliver is
extinguished.
b. A is obliged to give B a book
(generic/indeterminate thing). Since it is a
generic thing, even if one particular book s lost,
other books may take its place. Hence, the
obligation is not extinguished.
REMEDIES
In case of breach of obligation, the following are the
remedies available:
1. Specific performance, or substituted performance
by a third person in case of an obligation to deliver
a generic thing, and in obligations to do, unless it is
a purely personal act;
2. Rescission (or resolution in reciprocal obligations);
3. Damages, in any case;
A. Specific Performance
Remedies in connection with specific performance
1. Exhaustion of the properties of the debtor (not
exempt from attachment under the law);
2. Accionsubrogatoria (subrogatory action) – An
indirect action brought in the name of the debtor
by the creditor to enforce the former’s rights
except:
a. Personal rights of the debtor;
b. Rights inherent in the person of the
debtor;
c. Properties exempt from execution.;
e.g. family home
3. Accionpauliana ( rescissory action) – An action to
impugn or assail the acts done or contracts entered
into by the debtor in fraud of his creditor.
B. Rescission ( Resolution )
It refers to the cancellation of the contract or reciprocal
obligation in case of breach on the part of one, which breach
is violative of the reciprocity between the parties. This is
properly called resolution.
NOTE: The rescission under Art. 1380 is rescission based on
lesion or fraud upon creditors.
Applicability
Rescission or resolution is applicable in reciprocal
obligations, since it is implied therein.

Fulfillment or rescission of the obligation
GR: The injured party can only choose either fulfillment or
rescission of the obligation, and not both.
XPN: If fulfilment has become impossible, Art. 1191 allows
the injured party to seek rescission even after he has chosen
fulfillment (Ayson-Simon V. Adamos and Feria G.R. No. L-
39378, August 28, 1984).
1. The immediate demand ability of the obligation; and
2. Its performance or fulfillment by the obligor or debtor.
Although the obligee or creditor can demand the
performance of the obligation immediately, the quality
of immediate demand ability is not infringed or violated
when a reasonable period is granted for performance
(Jurado, 2009).

Conditional Obligation
*** END of LESSON 2***
An obligation subject to a condition and the effectivity of
Textbooks
which is subordinated to the fulfillment or nonfulfillment of
De Leon, Hector S & De Leon , Hector Jr.. (2010). Obligations a future and uncertain event, or upon a past event
and Contracts (pp.1-9) unknown to the parties (Pineda,2000).

LESSON 3
Condition
KINDS OF CIVIL OBLIGATIONS A condition is an event which is future and uncertain, upon
which the efficacy or extinguishment of an obligation
depends. It has two requisites: first, futurity; and second,
PURE AND CONDITIONAL OBLIGATIONS uncertainty.
Pure Obligation may or may not happen, cancellation if will not happen
An obligation whose performance does not depend upon a Period v Condition
future or uncertain event, or upon a past event or upon a
past event unknown to the parties, demandable at once BASIS PERIOD CONDITION
(NCC, Art. 1179). One without a condition or a term (hence, As to time Refers to the May refer to past
demandable at once), provided there will be no absurdity. future event unknown
to the parties
As to fulfilment It will happen at May or may not
there is a date/ futurity an exact date or Happen
Examples: at an indefinite
time, but is
a. I promise to pay you P 1million. [this is demandable
definite to arrive
at once, unless a period was really intended, as
Characteristic Futurity and Futurity and
when a loan has just been contracted (Floriano v.
certainty uncertainty
Delgado, 11 Phi. 154), when some time is
The effect of its No effect upon May give rise to
reasonably necessary for the actual fulfillment of
happening to the the existence an obligation
the obligation, as when a person binds himself to
obligation of the obligation (suspensive) or
pay immediately for the subscription of corporate
but only in its the cessation of
shares of stock. (Paul Schenker vs. William F.
demand ability one already
Gemperle, L-16449, August 31, 1962)]
existing
b. “I‟ll pay you P1million on demand.” (Abarri Inc vs
(resolutory)
Galan, 47 O.B. 6241) but instant performance is not If fulfillment is Valid. But the Annulled.
a necessity, otherwise absurd consequences will dependent upon court is
arise. the sole will of empowered to
NOTE: Other obligations which are demandable at once are: the debtor fix the duration
1. Obligations with a resolutory condition; and of the period.
Retroactivity No retroactivity. The moment the
2. Obligations with a resolutory term or period [NCC,
condition is
Arts. 1179 (2) and 1193 (2)].
fulfilled, the
The most distinctive characteristic of a pure obligation is its effects will
immediate demand ability. This quality, however, must not retroact on the
be understood in such a way as to lead to absurd day of the
interpretations which would literally require the obligor or constitution of
debtor to comply immediately with his obligation. A the obligation.
distinction must be made between:
 In case of a contract to sell, the obligation to deliver the
subject properties becomes demandable only upon the
happening of the positive suspensive condition (payment of
Suspensive Condition full purchase prise). Without full payment, there can be no
A condition the fulfillment of which will give rise to the breach of contract to speak of because the seller has no
acquisition of a right. While the condition has not arrived obligation yet to turn over the title (Reyes v. Tuparan, G.R.
yet, in the meantime, the rights and obligations of the No. 188064, June 1, 2011
parties are suspended.
Resolutory Condition
A condition where the rights already acquired are lost upon
NOTE: In suspensive condition or condition precedent, the fulfilment of the condition. It is also known as condition
efficiency or the obligatory force is subordinated to the subsequent.
happening of a “future and uncertain event”; if the
suspensive condition does not take place the parties would Suspensive Condition vs. Resolutory Condition
stand as if the conditional obligation never existed (Gaite v.
Fonacier, GRL-11827, July 31, 1961; Cheng v. Genato, 300 BASIS SUSPENSIVE RESULOTORY
SCRA 722, GR 129760, December29, 1998; Pineda, 2000). CONDITION CONDITION
Effect of Obligation arises Obligation is
fulfilment or becomes extinguished.
Effect of loss, deterioration and improvement in an effective.
obligation to deliver a determinate thing subject to a Effect of non If not fulfilled, no If not fulfilled,
suspensive condition fulfilment juridical relation juridical relation
is created. is consolidated.
BASIS WITH DEBTOR’S WITHOUT
When rights are Rights are not Rights are
FAULT DEBTOR’S FAULT
Acquired yet already vested,
Loss Obligation is not Obligation is
acquired, but but subject to
extinguished. extinguished.
there is hope or the treat or
Debtor pays
expectancy that danger of
damages.
they will soon be extinction.
Deterioration Creditor may Impairment
acquired.
choose borne by
rescission of creditor.
obligation or Negative Resolutory Condition
fulfillment An act, which if not done, would give rise to a cause of
(within demnity action against the obligor. It contemplates a situation where
for rights are already acquired but subject to an obligation, the
damages in non- fulfillment of which does not affect the rights already
either case) acquired but merely gives a cause of action in favor of the
Improvement a. By the thing nature or other party. In a contract of sale, the buyer’s non-payment
through time – inure to the of the price is a negative resolutory condition. In such case,
benefit of the creditor the seller has lost and cannot recover the ownership of the
b. At the debtors dept – Debtor property unless he takes action to set aside the contract of
shall have no right other sale (Heirs of Atienza v. Espidol, G.R. No. 180665, August 1,
that granted to a 2010).
usufructuary

NOTE: The abovementioned do not apply to indeterminate
or generic things on the basis of themaxim “genus nun
quamperuit” (genus never perishes). It will only apply when
the object or thing tobe given is specific.
Positive Suspensive Condition
A condition which requires a positive act on the part of the
obligor that gives rise to the acquisition of rights.
Potestative Condtion
A condition which depends upon the will of one of the
contracting parties (NCC, Art. 1182).
Effects of potestative conditions upon the obligation
If the condition is potestative in the sense that its fulfillment
depends exclusively upon the will of the debtor, and the
same is suspensive, both the condition and obligation are
VOID.
However, if the condition is a pre-existing one or the
condition is resolutory, only the condition is void, leaving the
obligation itself valid because what is left to the sole will of
the debtor is not the existence or the fulfillment of the
obligation but merely its extinguishment.
If the condition is potestative in the sense that its fulfillment
depends exclusively upon the will of the creditor, the
obligation shall be valid. This is so because the provision of
the first sentence of Art. 1182 extends only to conditions
which are potestative to the obligor or debtor. Besides, the
creditor is naturally interested in the fulfillment of the
condition since it is only by such fulfillment that the
obligation arises or becomes effective (Jurado, 2009 citing
NCC, Art. 1181 and Manresa).
Casual Condition
It is the performance or the fulfillment of the condition
which depends upon chance and/or the will of a third
person.
pustahan
Mixed Condition
It is the performance or fulfilment of the condition which
depends partly upon the will of a party to the obligation and
partly upon chance and or the will of a third person.
there are valid conditions
NOTE: Casual and mixed conditions are valid, unlike purely
potestative conditions.
Impossible Conditions
GR: Impossible conditions annul the obligation which
depends upon the parties but not of a third person.
XPNs:
1. Pre-existing obligation;
2. Obligation is divisible;
3. In simple or remuneratory donations;
4. In case of conditions not to do an impossible thing;
5. In testamentary dispositions.
NOTE: In the foregoing, the obligations remain valid, only
the condition is void and deemed to havenot been imposed.
it is applicable only to obligations not to do and gratuitous
obligations.
Other types of conditions
1. Positive – It involves the doing of an act
2. Negative –It involves the omission of an act
3. Divisible – It is susceptible of partial
4. Indivisible – It is not susceptible of partial
5. Conjunctive – There are several conditions in an
obligation all of which must be performed;
6. Alternative – There are several conditions in an
obligation but only one must be performed;
7. Possible – It is capable of fulfilment according to the
nature, law, public policy or good customs; and
8. Impossible – It is not capable of fulfilment according to
nature, law, public policy or good customs (NCC, Art.
1183
sun will imposible incase of impossible
OBLIGATIONS WITH A PERIOD
Obligation with a period or a term
Obligations for whose fulfillment a day certain has been
fixed, shall be demandable only when that day comes (NCC,
Art.1193).
Term or period
A certain length of time which determines the effectivity or
the extinguishment of the obligations.
Requisites of a valid period or term
1. Future;
2. Certain; and
3. Possible, legally and physically (Paras, 2008).
“Day certain”
It is understood to be that which must necessarily come,
although it may not be known when.
Kinds of terms or periods
1. Ex die – This is a term or period with suspensive
effect. The obligation begins only from a day
certain, in others words upon the arrival of the
period. like suspensive with a period
2. In diem – A period or term with a resolutory effect.
Up to a certain extent, the obligation remains valid,
but upon the arrival of said period, the obligation
terminates.
3. Legal – A period granted under the provisions of
the law.
4. Conventional or voluntary – The period agreed
upon or stipulated by the parties.
5. Judicial – The period or term fixed by the courts for
the performance of an obligation or for its
termination.
6. Definite – The exact date or time is known and
given.
7. Indefinite – It is something that will surely happen
but the date of happening is unknown.
e.g. “I will pay when my means permits me to do
so.”
When the debtor binds himself to pay when his means
permit him to do so, the obligation is deemed witha period
(NCC, Art. 1180). This is valid because it is not the payment
itself that is dependent upon the willof the debtor, but the
moment of payment
 As the time of payment is not fixed, the court must Effect of Culpable loss Culpable loss of
fix the same before any action for collection may culpableloss obliges the debtor any object due
beentertained, unless, the prior action of fixing the to deliver will give rise to
term or period will only be a formality and will substitute liability to
serveno purpose but delay (Tiglao v. Manila prestation without debtor.
RailroadCo., 98 Phil. 181, GR. L-7900, January 12, liability to debtor.
1956). Liability of the When substitution The creditor shall
Debtor has been made and have the right of
communicated to indemnity for
Effect of a fortuitous event to an obligation with a period the creditor, the damages when,
It only relieves the contracting parties from the fulfillment of obligor is liable for through the fault
their respective obligation during the term or period. the loss of the of the debtor, all
thing on account of the things which
delay, negligence or are alternatively
ALTERNATIVE OBLIGATIONS
fraud. the object of the
Alternative obligation obligation have
It is one where the debtor is alternatively bound by different been lost or the
prestations but the complete performance of one of them is compliance of
sufficient to extinguish the obligation. the obligation
has become
choices of detor to fulfil or comply severals , all are due impossible.
kahit anong kapalit basta same amount ng value. Void prestation If principal If one prestation
obligation is void, is void, the
Facultative obligation the creditor cannot others
It is one where the debtor, who has a reserved right to compel delivery of that are free
choose another prestation or thing, is bound to perform one the from any vices of
of the several prestations due or to deliver a thing as substitute. consent preserve
substitute for the principal. the validity of
the obligation.
Impossibility of If there is If some
Prestation is thing , only one is due incase of nawala they
prestation impossibility to prestations are
can used
deliver the principal impossible to
thing or prestation, perform except
Conjunctive obligation
the one – this one
One where the debtor has to perform several prestations; it
obligation is must be
is extinguished only by theperformance of all of them.
extinguished, even delivered.
if the
BASIS FACULTATIVE ALTERNATIVE
substituteobligation If all prestations
OBLIGATIONS OBLIGATIONS
is valid. are impossible to
Number of Only one object is Several objects
perform, the
prestation due. are due.
obligation is
Manner of May be complied May be complied
extinguished.
Compliance with by substitution with by fulfilling
Loss of Loss of the Where the
of one that is due. any of those
substitute substitute before choice is given to
alternately due.
the substitution is the
Right to choose Choice pertains GR: Choice
made through the creditor, the loss
only to debtor. pertain to
fault of the debtor of the alternative
debtor.
doesn’t make him through the fault
XPN: Expressly
liable. of the debtor
granted to
renders him
creditor or third
liable for
person.
Effect Fortuitous loss Fortuitous loss of damages.
offortuitousloss extinguishes all prestations
the obligation. will extinguish Right to choose prestation in an alternative obligation
the obligation. G.R: The right of choice belongs to the debtor
XPN: Unless it has been expressly given to the creditor (NCC,
Art. 1200). If the obligation is solidary and there is no stipulation to the
contrary, the choice by one will bindingpersonally upon him,
but not as to the others. Thus, if A and B solidarity bind
Limitations on debtor’s right to choose
themselves to deliver a horse or a carabao to C, the
 The debtor must absolutely perform the prestation
selection of A of the horse, when communicated to C will
chosen. He cannot compel the creditor to receive
bind him and he cannot later on deliver the carabao. But it is
part of one and part of the other undertaking;
not binding on B who may extinguish the obligation by
 The debtor shall have no right to choose those
delivering the carabao (Tolentino, 2002).
prestation which are impossible, unlawful or which
could not have been the object of the obligation
(NCC, Art. 1200);
Effect of loss of objects in alternative obligations
 The debtor shall lose the right to choose when
among the prestation whereby he is alternatively
DUE TO DUE TO
bound, only one is practicable (NCC, Art. 1202);
FORTITIOUS DEBTOR’S FAULT
 The selection made by the debtor (or the creditor
EVENT
when it has been expressly granted to him) cannot
Choice belongs to Debtor
be subjected by him to a condition or a term All are lost Debtor released Creditor shall
unless the creditor (or debtor in case the choice is from the have a right to be
with the creditor) consents thereto (Tolentino, obligation. indemnified for
2002). damages based
on the value of
Effectivity of the choice in alternative obligations the last thing
The choice made takes effect only upon communication of which
the choice to the other party and from such time the disappeared or
obligation ceases to be alternative (NCC, Art. 1201; NCC, Art. last service which
1205). became
impossible.
Some but not Debtor shall Debtor shall
NOTE: The notice of selection or choice may be in any form
all are lost deliver that deliver that
provided it is sufficient to make the other party know that
which he shall which he shall
the election has been made (Tolentino,2002).
choose from choose from
among the among the
When alternative obligation becomes a simple obligation remainder. remainder
1. When the debtor has communicated the choice to the without damages
creditor; Only one Deliver that which remains.
2. When debtor loses the right of choice among the remains
prestations whereby the debtor is alternatively bound, Choice belongs to Creditor
only one is practicable (NCC, Art. 1202). All are lost Debtor released Creditor may
from the claim the price or
obligation value of any of
NOTE: The choice made by the debtor does not require the them with
concurrence of the creditor. Otherwise, it would destroy the indemnity for
very nature of the right to select given to the debtor. damages.
Some but notall Creditor may Creditors mat
are lost choose from claim any of
Impossibility of choice due to creditor’s acts among there those subsisting
When choice is rendered impossible through rescind the mainder or that OR he may
contract with damages (NCC, Art. 1203). which remains if choose any of
only one subsist. those were lost,
but it is the price
Plurality of parties or value of
When there are various debtors or creditors and the which right to
obligation is necessary to make the selection effective, damages that
because none of them can extinguish the entire obligation. can be claimed.
Only one Deliver that which remains. In case of
remains fault of debtor, creditor has a right to
Indemnify for damages.

*** END of LESSON 3***

LESSON 4
Character of an obligation
JOINT AND SOLIDARY OBLIGATIONS GR: When two or more creditors or two or more debtors
concur in one and the same obligation, the presumption is
Joint Obligation that the obligation is joint.
One where the credit or debit shall be presumed to be XPNs:The obligation shall only be solidary when:
divided into as many equal shares as there are creditors or
1. Law requires solidarity;
debtors, the credit or debts being considered distinct from
2. Expressly stipulated that there is solidarity;
one another (NCC, Art. 1208). Each debtor is liable only for a
3. Nature of the obligation requires solidarity;
proportionate part of the debt and each creditor to his
e.g. Civil liability arising from crime.
proportionate share to the credit.
4. Charge or condition is imposed upon heirs or legatees
and the will expressly makes the charge or condition in
solidum (Manresa); or
5. Solidary responsibility is imputed by a final Judgment
Other terms for joint obligations are:
upon several defendants (Gutierrez v.utierrez, 56 Phil
(a) joint simply;
177, GR 34840, September 31, 1931).
(b) man comunada; or
(c) pro rata.

JOINT INDIVISIBLE OBLIGATIONS

Solidary Obligations
The obligation is joint because the parties are merely
It is where each of the debtors obliges to pay the entire
proportionately liable. It is indivisible because the object or
obligation while each one of the creditors has the right to
subject matter is not physically divisible into different parts.
demand from any of the debtors, the payment or fulfillment
In other words, it is joint as to liabilities of the debtors or
of the entire obligation (NCC,Art. 1207; Pineda, 2000).
rights of the creditors but indivisible as to compliance (De
obligation is already extinguished
Leon, 2010).

A joint indivisible obligation gives rise to indemnity for

Other terms for solidary obligations are:
damages from the time anyone of the debtors does not
(a) Joint solidarily;
comply with his undertaking. The debtors who may have
(b) Jointly and severally; or
been ready to fulfill their promises shall not contribute to
(c) In solidum.
the indemnity beyond the corresponding portion of the
price of the thing or of the value of the service in which the
Joint Obligation vs. Solidry Obligation obligation consists (NCC, Art. 1224).

JOINT SOLIDARY
OBLIGATION OBLIGATION Effects of different permutations of joint indivisible
Presumptionby Presumed by Not presumed. obligations
law law. (NCC, Must be
Art.1208). expressly 1. If there are two or more debtors, compliance with the
stipulated by the obligation requires the concurrence of all the debtors,
parties, or when although each for his own share. The obligation can be
the law or the enforced only by preceding against all of the debtors;
nature of the 2. If there are two or more creditors, the concurrence or
obligation collective act of all the creditors, although each of his
requires own share, is also necessary for the enforcement of the
solidarity obligation;
(NCC, Art. 1207). 3. Each credit is distinct from one another; therefore a
Liability of Each Proportionate Obliged to pay joint debtor cannot be required to pay for the share of
debtor part of the entire the entire
another with debtor, although he may pay if he wants
debt. obligation.
to.
Right of the Each creditor, if Each creditor has
creditor to the there are several, the right to In case of insolvency of one of the debtors, the others shall
fulfilment of the is entitled only to demand from not be liable for his shares. To hold otherwise would destroy
obligation a proportionate any debtors, the the joint character of the obligation (NCC, Art. 1209).
part of the payment or the
credit. fulfillment of the
entire obligation Effect of breach of a joint indivisible obligation by debtor
(Tolentino, If one of the joint debtors fails to comply with his
1999). undertaking, and the obligation can no longer be fulfilled or
performed, it will then be converted into one of indemnity the debtor-pay or to recover from the others their
for damages. Innocent joint debtor shall not contribute to respective shares. In so far as the payment is concerned, this
the indemnity beyond his corresponding share of the kind of solidarity is similar to a mutual guaranty. Its effects
obligation. are as follows:

1. Each debtor can be required to pay the entire

obligation; but after the payment, he can recover from
the co-debtors their respective shares;
SOLIDARY OBLIGATIONS
2. The debtor who is required to pay may set up by way of
Each one of the debtors is obliged to pay the entire
compensation his own claim against the creditor, in this
obligation, and each one of the creditors has the right to
case, the effect is the same as that of payment;
demand from any of the debtors the payment or fulfillment
3. The total remission of a debt in favor of a debtor
of the entire obligation.
releases all the debtors ; but when this remission affects
only the share of one debtor, the other debtors are still
Kinds of solidary obligation liable for the balance of the obligation;
1. Passive – Solidarity on the part of the debtors; 4. All the debtors are liable for the loss of the thing due,
2. Active –Solidarity on the part of the creditors ; even if such loss is caused by only one of them, or by
3. Mixed –Solidarity on both sides. fortuitous event after one of the debtors has incurred in
delay;
5. The interruption of prescription as to one debtor affects
Active solidarity all the others; but the renunciation by one debtor of the
The essence of active solidarity consists in the authority of prescription already had does not prejudice the others,
each creditor to claim and enforce the rights of all, with the because the extinguishment of the obligation by
resulting obligation of paying everyone what belongs to him; prescription extinguishes also the mutual
there is no merger, much less a renunciation of rights, but representation among the solidary debtors; and
only mutual representation. It is thus essentially a mutual 6. The interest due by reason of the delay by one of the
agency. Its juridical effects may be summarized as follows: debtors are borne by all of them.
1. Since it is a reciprocal agency, the death of a solidary
creditor does not transmit the solidarity to each of his NOTE: Example of words that connote solidary obligation: a)
heirs but to all of them taken together; joint and several; b) in solidum; c) individually and
2. Each creditor represents the others in the act of collectively; d) each will pay the whole value; e) “I promise
receiving payment, and in all other acts which tend to to pay” and there are two or more signatures; and f) juntos
secure the credit or make it more advantageous. Hence, o separadamente
if he receives only a partial payment, he must divide it
among the other creditors. He can interrupt the period
Solidarity v. Indivisibility
of prescription or render the debtor in default, for the
benefit of all other creditors; BASIS SOLIDARITY INDIVISIBILITY
3. One creditor, however, does not represent the others in As to the kind of Refers to the Refers to the
such acts as novation (even if the credit becomes more unity it refers to vinculum existing prestation or
advantageous), compensation and remission. In these between the object of the
cases, even if the debtor is released, the other creditors subjects or Contract
can still enforce their rights against the creditor who parties
made the novation, compensation or remission; As to the Requires the Does not require
requirement of plurality of plurality of
4. The creditor and its benefits are divided equally among
plurality of parties or subjects or
the creditors, unless there is an agreement among them
parties or subjects parties.
to divide differently. Hence, once the credit is collected,
subjects
an accounting and a distribution of the amount As to the effect In case of breach, In case of breach,
collected should follow; of breach the liability of it is converted to
5. The debtor may pay to any solidary creditor, but if a the solidary one of indemnity
judicial demand is made on him, he must pay only to debtors although for damages and
the plaintiff; and converted into the indivisibility
6. Each creditor may renounce his right even against the one of the of the obligation
will of the debtor, and the latter need not thereafter indemnity for is terminated
pay the obligation to the former. damages remains and
solidary so each debtor is
liable only for his
Passive solidarity part of the
In passive solidarity, the essence is that each debtor can be indemnity
made to answer for the others, with the right on the part of As to the effect Death of solidary Heirs of the
 of death of a debtor debtor remain 3. Analogous things which are by their nature susceptible of
party terminates the bound to partial performance (NCC, Art.1225).
solidarity, the perform the
ties or vinculum same prestation.
being in Factors to determine whether an obligation is divisible of
transmissible to indivisible
the heirs
a. The will or intention of the parties (express or implied);
b. The objective or purpose of the stipulated prestation;
c. The nature of the thing; and
d. The provisions of law affecting the prestation.
DIVISIBLE AND INDIVISBLE OBLIGATIONS

Divisible obligations
Those which have as their object a prestation which is OBLIGTIONS TO GIVE OBLIGATIONS TO DO
susceptible of partial performance with the essence of the In obligations to give, those In obligations to do,
obligation being change for the delivery ofcertain invisibility is also
objects such as an animal presumed,
or a chair areinvisible and it is only when there
Indivisible obligations [(NCC, 1225 (1)] are under the exceptional
Those which have as their object a prestation which is not cases mentioned in New
Civil Code (NCC), Art 1225
susceptible of partial performance, because otherwise the
(2) that they are divisible.
essence of the obligation will be changed. The obligation is
clearly indivisible because the performance of the contract
cannot be done in parts, otherwise, the value of what is Effect of Illegality of a part of a contract
transferred is diminished (Nazareno v. CA, G.R. No. 138842,
October 18, 2000). 1. Divisible contract – The illegal part is void and
unenforceable. Legal part is valid and enforceable (NCC, Art.
NOTE: The divisibility of the object does not necessarily 1420).
determine the divisibility of the obligation; while the 2. Indivisible contract – The entire contract is indivisible and
indivisibility of the object carries with it the indivisibility of unenforceable.
the obligation.

Partial in indivisible obligation

Test of divisibility
Whether or not the prestation is susceptible of partial
performance, not in the sense of performance in separate or
divided parts, but in the sense of the possibility of realizing
the purpose which the obligation seeks to obtain. If a thing
could be divided into parts and as divided, its value is
impaired disproportionately, that thing is indivisible (Pineda,
2000).
Obligations that are deemed indivisible
1. Obligations to give definite things;
2. Those which are not susceptible of partial performance;
3. Even the object or service may be physically divisible, an
obligation is indivisible if so provided (i) by law or (i)
intended by the parties (NCC, Art. 1225).
NOTE: A pledge or mortgage is one and indivisible by
provision of law, and the rules apply even if the obligation is
joint and not solidary (NCC, Art. 2089).
Obligations that are deemed divisible
When the object of the obligation involves:
1. Certain number of days of work;
2. Accomplishment of work by metrical unit;
GR:In indivisible obligations, partial performance is
equivalent to non-performance.
XPNs:(NCC, Articles 1234 and 1235).
1. Where the obligation has been substantially performed
in good faith, the debtor may recover as if there had
been complete performance, minus the damages
suffered by the creditor; and
2. Where the creditor accepts performance knowing its
incompleteness and without protest, the obligation is
deemed fully performed.
OBLIGATIONS WITH A PENAL CLAUSE
An obligation with a penal clause is one with an accessory
undertaking by virtue of which the obligor assumes a greater
liability in case of breach of the obligations (Jurado, 2009).
Penal clause
A penal clause is an accessory undertaking to assume
greater liability in case of breach. It is attached to an
obligation in order to insure performance. The penalty is
generally a sum of money. But it can also be any other thing
stipulated by the parties, including an act or abstention.
there is penalty
Double functions: XPNs: Damages shall still be paid even if there is a penal
1. To provide for liquidated damages; and clause if:
2. To strengthen the coercive force of the obligation by the
1. There is a stipulation to the contrary
threat of greater responsibility in case of breach.
2. The debtor refuses to pay the agreed penalty; or
3. The debtor is guilty of fraud in the fulfillment of the
Kinds of penalties obligation (NCC, Art. 1126).

1. as to origin
a. Legal - it is legal when it is constituted by law NOTE: The nullity of penal clause does not carry with it that
b. Conventional – it is constituted by agreement of the of the principal obligation. For example, the penal clause
parties may be void because it is contrary to law, morals, good
custom, public order or public policy. In such case, the
principal obligation subsists if valid.
2. as to purpose
a. compensatory – it is compensatory when it is
established for the purpose of indemnifying the NOTE: When there are several debtors in an obligation with
damages suffered by the oblige or creditor in case a penal clause, the divisibility of the principal obligation
of breach of the obligation among the debtors does not necessarily carry with it the
b. punitive – it is punitive when it is established for divisibility of the penalty among them
the purpose of punishing the obligor or debtor in
case of breach of obligation
*** END of LESSON 4***
3. as to effect
a. subsidiary – it is subsidiary when only the penalty
may be demanded in case of breach of the
obligation
b. joint – it is joint when injured party may demand
the enforcement of both the penalty and the
principal obligation.

Can the debtor just choose penalty over non-fulfillment?

GR: The debtor cannot exempt himself from the

performance of the obligation by paying the penalty (NCC,
Art. 1227).

XPN: When the right has been expressly reserved to the

debtor (NCC, Art. 1227).

1. When the right has been clearly granted to

2. If the creditor has decided to require the fulfillment of the
obligation, the performance thereofshould become
impossible without his fault, the penalty may be enforced
(NCC, Art. 1227).

NOTE: The creditor need not present proof of actual

damages suffered by him in order that the penalty may be
demanded (NCC, Art. 1228). In this jurisdiction, there is no
difference between a penalty and liquidated damages, so far
as the results are concerned. Whatever differences exist
between them as a matter of language, they are treated the
same legally (Rabuya, 2017).

Effect of incorporating a penal clause in an obligation

GR:The Penalty fixed by the parties is a compensation or

substitute for damages in case of breach.
DIFFERENT KINDS OF OBLIGATIONS
Section 1 – Pure and Conditional Obligations
Art. 1179. Every obligation whose performance does not
depend upon a future or uncertain event, or upon a past
event unknown to the parties, is demandable at once.
Every obligation which contains a resolutory condition shall
also be demandable, without prejudice to the effects of the
happening of the event. (1113)
Art. 1180. When the debtor binds himself to pay when his
means permit him to do so, the obligation shall be deemed
to be one with a period, subject to the provisions of Article
1197. (n)
Art. 1181. In conditional obligations, the acquisition of
rights, as well as the extinguishment or loss of those already
acquired, shall depend upon the happening of the event
which constitutes the condition. (1114)
Art. 1182. When the fulfillment of the condition depends
upon the sole will of the debtor, the conditional obligation
shall be void. If it depends upon chance or upon the will of a
third person, the obligation shall take effect in conformity
with the provisions of this Code. (1115)
Art. 1183. Impossible conditions, those contrary to good
customs or public policy and those prohibited by law shall
annul the obligation which depends upon them. If the
obligation is divisible, that part thereof which is not affected
by the impossible or unlawful condition shall be valid.
The condition not to do an impossible thing shall be
considered as not having been agreed upon. (1116a)
Art. 1184. The condition that some event happen at a
determinate time shall extinguish the obligation as soon as
the time expires or if it has become indubitable that the
event will not take place. (1117)
Art. 1185. The condition that some event will not happen at
a determinate time shall render the obligation effective from
the moment the time indicated has elapsed, or if it has
become evident that the event cannot occur.
If no time has been fixed, the condition shall be deemed
fulfilled at such time as may have probably been
contemplated, bearing in mind the nature of the obligation.
(1118)
Art. 1186. The condition shall be deemed fulfilled when the
obligor voluntarily prevents its fulfillment. (1119)
Art. 1187. The effects of a conditional obligation to give,
once the condition has been fulfilled, shall retroact to the
day of the constitution of the obligation. Nevertheless, when
the obligation imposes reciprocal prestations upon the
parties, the fruits and interests during the pendency of the
condition shall be deemed to have been mutually
compensated. If the obligation is unilateral, the debtor shall
appropriate the fruits and interests received, unless from
the nature and circumstances of the obligation it should be
inferred that the intention of the person constituting the
same was different.
In obligations to do and not to do, the courts shall
determine, in each case, the retroactive effect of the
condition that has been complied with. (1120)
Art. 1188. The creditor may, before the fulfillment of the
condition, bring the appropriate actions for the preservation
of his right.
The debtor may recover what during the same time he has
paid by mistake in case of a suspensive condition. (1121a)
Art. 1189. When the conditions have been imposed with the
intention of suspending the efficacy of an obligation to give,
the following rules shall be observed in case of the
improvement, loss or deterioration of the thing during the
pendency of the condition:
(1) If the thing is lost without the fault of the debtor, the
obligation shall be extinguished;
(2) If the thing is lost through the fault of the debtor, he shall
be obliged to pay damages; it is understood that the thing is
lost when it perishes, or goes out of commerce, or
disappears in such a way that its existence is unknown or it
cannot be recovered;
(3) When the thing deteriorates without the fault of the
debtor, the impairment is to be borne by the creditor;
(4) If it deteriorates through the fault of the debtor, the
creditor may choose between the rescission of the
obligation and its fulfillment, with indemnity for damages in
either case;
(5) If the thing is improved by its nature, or by time, the
improvement shall inure to the benefit of the creditor;
(6) If it is improved at the expense of the debtor, he shall
have no other right than that granted to the usufructuary.
(1122)
Art. 1190. When the conditions have for their purpose the
extinguishment of an obligation to give, the parties, upon
the fulfillment of said conditions, shall return to each other
what they have received.
In case of the loss, deterioration or improvement of the
thing, the provisions which, with respect to the debtor, are
laid down in the preceding article shall be applied to the
party who is bound to return.
As for the obligations to do and not to do, the provisions of
the second paragraph of Article 1187 shall be observed as
regards the effect of the extinguishment of the obligation.
(1123)
Art. 1191. The power to rescind obligations is implied in
reciprocal ones, in case one of the obligors should not
comply with what is incumbent upon him.
The injured party may choose between the fulfillment and
the rescission of the obligation, with the payment of
damages in either case. He may also seek rescission, even
after he has chosen fulfillment, if the latter should become
impossible.
The court shall decree the rescission claimed, unless there
be just cause authorizing the fixing of a period.
This is understood to be without prejudice to the rights of
third persons who have acquired the thing, in accordance
with Articles 1385 and 1388 and the Mortgage Law. (1124)
Art. 1192. In case both parties have committed a breach of
the obligation, the liability of the first infractor shall be
equitably tempered by the courts. If it cannot be determined
which of the parties first violated the contract, the same
shall be deemed extinguished, and each shall bear his own
damages. (n)
SECTION 2. – Obligations with a Period
Art. 1193. Obligations for whose fulfillment a day certain has
been fixed, shall be demandable only when that day comes.
Obligations with a resolutory period take effect at once, but
terminate upon arrival of the day certain.
A day certain is understood to be that which must
necessarily come, although it may not be known when.
If the uncertainty consists in whether the day will come or
not, the obligation is conditional, and it shall be regulated by
the rules of the preceding Section. (1125a)
Art. 1194. In case of loss, deterioration or improvement of
the thing before the arrival of the day certain, the rules in
Article 1189 shall be observed. (n)
Art. 1195. Anything paid or delivered before the arrival of
the period, the obligor being unaware of the period or
believing that the obligation has become due and
demandable, may be recovered, with the fruits and
interests. (1126a)
Art. 1196. Whenever in an obligation a period is designated,
it is presumed to have been established for the benefit of
both the creditor and the debtor, unless from the tenor of
the same or other circumstances it should appear that the
period has been established in favor of one or of the other.
(1127)
Art. 1197. If the obligation does not fix a period, but from its
nature and the circumstances it can be inferred that a
period was intended, the courts may fix the duration
thereof.
The courts shall also fix the duration of the period when it
depends upon the will of the debtor.
In every case, the courts shall determine such period as may
under the circumstances have been probably contemplated
by the parties. Once fixed by the courts, the period cannot
be changed by them. (1128a)
Art. 1198. The debtor shall lose every right to make use of
the period:
(1) When after the obligation has been contracted, he
becomes insolvent, unless he gives a guaranty or security for
the debt;
(2) When he does not furnish to the creditor the guaranties
or securities which he has promised;
(3) When by his own acts he has impaired said guaranties or
securities after their establishment, and when through a
fortuitous event they disappear, unless he immediately gives
new ones equally satisfactory;
(4) When the debtor violates any undertaking, in
consideration of which the creditor agreed to the period;
(5) When the debtor attempts to abscond. (1129a)
SECTION 3. – Alternative Obligations
Art. 1199. A person alternatively bound by different
prestations shall completely perform one of them.
The creditor cannot be compelled to receive part of one and
part of the other undertaking. (1131)
Art. 1200. The right of choice belongs to the debtor, unless
it has been expressly granted to the creditor.
The debtor shall have no right to choose those prestations
which are impossible, unlawful or which could not have
been the object of the obligation. (1132)
Art. 1201. The choice shall produce no effect except from
the time it has been communicated. (1133)
Art. 1202. The debtor shall lose the right of choice when
among the prestations whereby he is alternatively bound,
only one is practicable. (1134)
Art. 1203. If through the creditor’s acts the debtor cannot
make a choice according to the terms of the obligation, the
latter may rescind the contract with damages. (n)
Art. 1204. The creditor shall have a right to indemnity for
damages when, through the fault of the debtor, all the
things which are alternatively the object of the obligation
have been lost, or the compliance of the obligation has
become impossible.
The indemnity shall be fixed taking as a basis the value of
the last thing which disappeared, or that of the service
which last became impossible.
Damages other than the value of the last thing or service
may also be awarded. (1135a)
Art. 1205. When the choice has been expressly given to the
creditor, the obligation shall cease to be alternative from the
day when the selection has been communicated to the
debtor.
Until then the responsibility of the debtor shall be governed
by the following rules:
(1) If one of the things is lost through a fortuitous event, he
shall perform the obligation by delivering that which the
creditor should choose from among the remainder, or that
which remains if only one subsists;
(2) If the loss of one of the things occurs through the fault of
the debtor, the creditor may claim any of those subsisting,
or the price of that which, through the fault of the former,
has disappeared, with a right to damages;
(3) If all the things are lost through the fault of the debtor,
the choice by the creditor shall fall upon the price of any one
of them, also with indemnity for damages.
The same rules shall be applied to obligations to do or not to
do in case one, some or all of the prestations should become
impossible. (1136a)
Art. 1206. When only one prestation has been agreed upon,
but the obligor may render another in substitution, the
obligation is called facultative.
The loss or deterioration of the thing intended as a
substitute, through the negligence of the obligor, does not
render him liable. But once the substitution has been made,
the obligor is liable for the loss of the substitute on account
of his delay, negligence or fraud. (n)
SECTION 4. – Joint and Solidary Obligations
Art. 1207. The concurrence of two or more creditors or of
two or more debtors in one and the same obligation does
not imply that each one of the former has a right to
demand, or that each one of the latter is bound to render,
entire compliance with the prestation. There is a solidary
liability only when the obligation expressly so states, or
when the law or the nature of the obligation requires
solidarity. (1137a)
Art. 1208. If from the law, or the nature or the wording of
the obligations to which the preceding article refers the
contrary does not appear, the credit or debt shall be
presumed to be divided into as many shares as there are
creditors or debtors, the credits or debts being considered
distinct from one another, subject to the Rules of Court
governing the multiplicity of suits. (1138a)
Art. 1209. If the division is impossible, the right of the
creditors may be prejudiced only by their collective acts, and
the debt can be enforced only by proceeding against all the
debtors. If one of the latter should be insolvent, the others
shall not be liable for his share. (1139)
Art. 1210. The indivisibility of an obligation does not
necessarily give rise to solidarity. Nor does solidarity of itself
imply indivisibility. (n)
Art. 1211. Solidarity may exist although the creditors and
the debtors may not be bound in the same manner and by
the same periods and conditions. (1140)
Art. 1212. Each one of the solidary creditors may do
whatever may be useful to the others, but not anything
which may be prejudicial to the latter. (1141a)
Art. 1213. A solidary creditor cannot assign his rights
without the consent of the others. (n)
Art. 1214. The debtor may pay any one of the solidary
creditors; but if any demand, judicial or extrajudicial, has
been made by one of them, payment should be made to
him. (1142a)
Art. 1215. Novation, compensation, confusion or remission
of the debt, made by any of the solidary creditors or with
any of the solidary debtors, shall extinguish the obligation,
without prejudice to the provisions of Article 1219.
The creditor who may have executed any of these acts, as
well as he who collects the debt, shall be liable to the others
for the share in the obligation corresponding to them.
(1143)
Art. 1216. The creditor may proceed against any one of the
solidary debtors or some or all of them simultaneously. The
demand made against one of them shall not be an obstacle
to those which may subsequently be directed against the
others, so long as the debt has not been fully collected.
(1144a)
Art. 1217. Payment made by one of the solidary debtors
extinguishes the obligation. If two or more solidary debtors
offer to pay, the creditor may choose which offer to accept.
He who made the payment may claim from his co-debtors
only the share which corresponds to each, with the interest
for the payment already made. If the payment is made
before the debt is due, no interest for the intervening period
may be demanded.
When one of the solidary debtors cannot, because of his
insolvency, reimburse his share to the debtor paying the
obligation, such share shall be borne by all his co-debtors, in
proportion to the debt of each. (1145a)
Art. 1218. Payment by a solidary debtor shall not entitle him
to reimbursement from his co-debtors if such payment is
made after the obligation has prescribed or become illegal.
(n)
Art. 1219. The remission made by the creditor of the share
which affects one of the solidary debtors does not release
the latter from his responsibility towards the co-debtors, in
case the debt had been totally paid by anyone of them
before the remission was effected. (1146a)
Art. 1220. The remission of the whole obligation, obtained
by one of the solidary debtors, does not entitle him to
reimbursement from his co-debtors. (n)
Art. 1221. If the thing has been lost or if the prestation has
become impossible without the fault of the solidary debtors,
the obligation shall be extinguished.
If there was fault on the part of any one of them, all shall be
responsible to the creditor, for the price and the payment of
damages and interest, without prejudice to their action
against the guilty or negligent debtor.
If through a fortuitous event, the thing is lost or the
performance has become impossible after one of the
solidary debtors has incurred in delay through the judicial or
extrajudicial demand upon him by the creditor, the
provisions of the preceding paragraph shall apply. (1147a)
Art. 1227. The debtor cannot exempt himself from the
performance of the obligation by paying the penalty, save in
the case where this right has been expressly reserved for
him. Neither can the creditor demand the fulfillment of the
obligation and the satisfaction of the penalty at the same
time, unless this right has been clearly granted him.
However, if after the creditor has decided to require the
fulfillment of the obligation, the performance thereof should
become impossible without his fault, the penalty may be
enforced. (1153a)

Art. 1222. A solidary debtor may, in actions filed by the
creditor, avail himself of all defenses which are derived from
the nature of the obligation and of those which are personal
to him, or pertain to his own share. With respect to those
which personally belong to the others, he may avail himself
thereof only as regards that part of the debt for which the
latter are responsible. (1148a)
SECTION 5. – Divisible and Indivisible Obligations
Art. 1228. Proof of actual damages suffered by the creditor
is not necessary in order that the penalty may be demanded.
(n)
Art. 1229. The judge shall equitably reduce the penalty
when the principal obligation has been partly or irregularly
complied with by the debtor. Even if there has been no
performance, the penalty may also be reduced by the courts
if it is iniquitous or unconscionable. (1154a)

Art. 1223. The divisibility or indivisibility of the things that Art. 1230. The nullity of the penal clause does not carry with
are the object of obligations in which there is only one it that of the principal obligation.
debtor and only one creditor does not alter or modify the
provisions of Chapter 2 of this Title. (1149) The nullity of the principal obligation carries with it that of
the penal clause. (1155)
Art. 1224. A joint indivisible obligation gives rise to
indemnity for damages from the time anyone of the debtors
does not comply with his undertaking. The debtors who may
have been ready to fulfill their promises shall not contribute
to the indemnity beyond the corresponding portion of the
price of the thing or of the value of the service in which the
obligation consists. (1150)

Art. 1225. For the purposes of the preceding articles,

obligations to give definite things and those which are not
susceptible of partial performance shall be deemed to be
indivisible.

When the obligation has for its object the execution of a

certain number of days of work, the accomplishment of
work by metrical units, or analogous things which by their
nature are susceptible of partial performance, it shall be
divisible.

However, even though the object or service may be

physically divisible, an obligation is indivisible if so provided
by law or intended by the parties.

In obligations not to do, divisibility or indivisibility shall be

determined by the character of the prestation in each
particular case. (1151a)

SECTION 6. – Obligations with a Penal Clause

Art. 1226. In obligations with a penal clause, the penalty

shall substitute the indemnity for damages and the payment
of interests in case of noncompliance, if there is no
stipulation to the contrary. Nevertheless, damages shall be
paid if the obligor refuses to pay the penalty or is guilty of
fraud in the fulfillment of the obligation.

The penalty may be enforced only when it is demandable in

accordance with the provisions of this Code. (1152a)